Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

New Auto Safety Advertising Guidelines Prompted by Tesla

The agency says automakers who claim ratings higher than five stars are misleading the public.

DETROIT (AP) -- A U.S. safety agency is tightening the guidelines that control how automakers use government crash tests in advertising.

The change by the National Highway Traffic Safety Administration was prompted by Tesla Motors Inc., the Palo Alto, Calif., electric car company. Tesla has promoted its electric Model S as the safest car in America, saying it earned a 5.4-star rating from the government.

The new guidelines stress that NHTSA doesn't give crash-test ratings higher than five stars. The agency says automakers who claim ratings higher than that are misleading the public.

"Tesla's claim was an example of the potential confusion and inaccuracy that could be caused by incorrect use of the five-star ratings information in advertising and marketing statements," NHTSA said Wednesday in a statement. "As a result, NHTSA reviewed its advertising guidelines and made updates to ensure consumers receive accurate and consistent information."

Companies that don't follow the guidelines could see "buyer alert" warnings from the government. They could also be kicked out of the ratings program or be referred to other agencies for further, unspecified action.

NHTSA Administrator David Strickland said Wednesday on the floor of the Los Angeles Auto Show that the agency needed an enforcement mechanism to make sure all automakers follow the rules. He said Tesla prompted the change, but other manufacturers that he didn't identify also have violated the guidelines.

A Tesla spokeswoman would not comment Wednesday. On Tuesday, the automaker's website featured a headline that said the Model S was the safest car in America. But by Wednesday afternoon, the site had been revised. "The highest safety rating in America," the headline said, with a smaller headline saying the Model S has a five-star rating in all categories, which is accurate.

NHTSA on Tuesday opened an investigation into battery fires in two Model S cars in the U.S. Both struck metal road debris that punctured the batteries and touched off fires. No one was hurt in either fire, and no decision has been made on whether there will be a recall.